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Petrofac Annual report and accounts 2009 Petrofac Services Limited Annual report 117 Jermyn Street and accounts 2009 London SW1Y 6HH United Kingdom T +44 20 7811 4900 F +44 20 7811 4901 www.petrofac.com The difference is… 2 Petrofac Annual report and accounts 2009 Today, the power of Petrofac’s service offering has never been greater. Although the scale of our business has increased significantly in recent years, our approach remains constant. We continue to follow the principles that have driven our business from the earliest days: diligence in execution, customer focus and passionate attention to the smallest detail. Our intent is to further improve our business performance, and we remain resolutely focused on delivering optimum returns for …in the detail all of our stakeholders. 2 3 Petrofac Annual report Petrofac Annual report and accounts 2009 and accounts 2009 Contents 2 Financial highlights Overview 4 At a glance 6 Structure Financial highlights World-class results 8 Insight makes the difference 10 Making a difference in performance 12 Think different, act different, 05 06 07 08 09 This has been another excellent year for be different Revenue 14 A fresh perspective, a different 0 Petrofac. In a challenging year for our US$3,655m approach 3,655 33 16 Integrity, support, responsibility: 3, industry we have delivered another strong the difference is demonstrable 0 44 financial performance with growth in net Business review Business 2, 4 18 Chairman’s statement 86 profit for the group of over 33% on revenue 5 1, 22 Interview with the 48 Group Chief Executive 1, up by 10% at US$3.65 billion. 26 Operating review +10 % US$millions Following substantial new contract 50 Financial review 05 06 07 08 09 EBITDA awards in the year, our record order intake US$559.0m 559.0 of US$7.3 billion doubled our backlog to US$8.1 billion giving us outstanding 419.0 revenue visibility for the current year 53 Corporate social responsibility responsibility social Corporate 301.3 and beyond. 198.3 US$millions We remain committed to our aim of +33% 115.6 3 05 06 07 08 09 becoming the leading provider of facilities Net profit US$353.6m solutions to the oil & gas industry, and aim 353.6 to achieve this by: 265.0 64 Directors’ information Governance 66 Senior management team 188.7 69 Corporate governance report 76 Directors’ remuneration report 120.3 ■ Maintaining and improving on ■ Expanding our established 87 Statement of Directors’ US$millions % 75.4 +33 high safety standards service offering into new responsibilities 05 06 07 08 09 countries and regions EPS ■ Leveraging customer relationships Earnings per share (diluted) by providing a range of services ■ Assisting customers in achieving 103.19 cents per share 103.19 across the life cycle of an asset their local content goals by accessing in-country resources Financial statements Financial 77.11 ■ Generating predictable, long-term and improving the competence 88 Independent auditors’ report returns from a diversified portfolio and technical skills of local 89 Consolidated income statement 54.61 of investments, leveraging the workforces 90 Consolidated statement of group’s service capabilities in comprehensive income 1 34.87 order to understand and manage ■ Improving revenue and earnings 91 Consolidated statement of Cents per share +34% 22.4 better the risks involved stability through a diversified and financial position 05 06 07 08 09 complementary business model 92 Consolidated cash flow statement Backlog ■ Focusing on regions with major 93 Consolidated statement of changes in equity US$8,071m hydrocarbon reserves where ■ Attracting and retaining 8,071 94 Notes to the consolidated significant capital and operational specialists and key personnel financial statements expenditures are expected 1 3 0 Independent auditors’ report ■ Identifying, acquiring, integrating (Petrofac Limited) and developing complementary 1 3 1 Company financial statements, 4,441 businesses where appropriate Petrofac Limited 4,173 3,997 1 4 3 Oil & gas reserves (unaudited) 3,244 1 4 4 Shareholder information +102% US$millions Five year summary1 2009 2008 2007 2006 2005 Information not subject to audit Restated Restated Revenues2 3,655,426 3,329,536 2,440,251 1,863,906 1,485,472 EBITDA2 558,966 418,952 301,259 198,349 115,634 Profit for the year2,3 353,603 264,989 188,716 120,332 75,397 Diluted earnings per share (cents)2 103.19 77.11 54.61 34.87 22.41 Total assets 3,600,571 2,269,821 1,748,007 1,401,847 986,650 Total equity 906,755 559,031 522,970 324,904 195,127 Average number of employees2 11,628 10,383 9,027 7,482 6,598 Backlog (US$ millions) 8,071 3,997 4,441 4,173 3,244 1 In US$’000 unless otherwise stated. 2 On continuing operations. 3 Attributable to Petrofac Limited shareholders. 4 5 Petrofac Annual report Petrofac Annual report and accounts 2009 and accounts 2009 At a glance Overview Engineering & Offshore Engineering, Energy At a glance Construction Engineering & Training Services Developments Operations and Production Solutions Petrofac is a provider of integrated Employee Employee Employee Employee facilities solutions to the international numbers: numbers: numbers: numbers: oil & gas industries, with a record 4,200 4,100 2,900 500 of delivering the best results for our shareholders. At the same time, we focus on results for customers, striving for the highest levels of performance, often in Revenue Revenue Revenue Revenue US$2,509m US$626.7m US$349.7m US$248.7m challenging environments, but in 2008: US$1,994m 2008: US$776.6m 2008: US$510.4m 2008: US$153.4m geographic regions we know well; Percentage of Percentage of Percentage of Percentage of results for our people, who see their group revenue group revenue group revenue group revenue skill and endeavour matched by our 67% 17% 9% 7% commitment to safety and support; and results for the communities +26% -19 % -31% +62% Net profit Net profit Net profit Net profit where we work, through an US$265.1m US$12.8m US$32.4m US$46.2m appreciation of cultural diversity 2008: US$206.3m 2008: US$16.4m 2008: US$33.1m 2008: US$21.9m and concern for the environment. Percentage of Percentage of Percentage of Percentage of group profit group profit group profit group profit We have some 11,700 employees 74% 4% 9% 13% operating out of five strategically located operational centres, in +28 % -22% -2% +111% This segment includes Engineering This segment is solely comprised of This segment comprises: Engineering This segment is solely comprised Aberdeen, Sharjah, Woking, Chennai & Construction and Engineering & Offshore Engineering & Operations. Services, Training Services and of Energy Developments. Construction Ventures. Production Solutions. and Mumbai and a further 19 offices 2009 highlights 2009 highlights 2009 highlights Awarded two new contracts in the 2009 highlights ■ commencement of production from worldwide. A record order intake during the year UK North Sea: Engineering Services: both the Don Southwest and West Don of US$6.3 billion including: ■ a three-year engineering and ■ awarded a three-year consultancy fields in the UK North Sea, achieved in ■ US$2.3 billion lump-sum EPC project construction contract with Apache contract with Qatar Petroleum (QP) less than a year from field development with Abu Dhabi Company for Onshore worth circa £75 million ■ added around 300 people to our programme approval Oil Operations (ADCO) ■ a five-year maintenance contract Mumbai and Chennai offices ■ excellent production from the Cendor ■ US$2.2 billion EPC project for the El Merk with BP worth circa £100 million Training Services: field, offshore Malaysia with 14,400 central processing facility in Algeria Extended its Duty Holder contract with ■ awarded a US$5 million three-year TMS barrels per day (bpd) of oil achieved ■ Petrofac Emirates awarded first contract contract with BP in the UK North Sea over the year and production uptime with GASCO in Abu Dhabi Venture Production to May 2011 ■ manages 14 training facilities in six of over 99% ■ the award of Petrofac’s first project in Through a focus on asset integrity, countries training around 50,000 Saudi Arabia ■ in Tunisia, the Chergui gas plant eliminated a number of legacy Health & delegates worldwide each year ■ a US$100 million FEED study for Safety Executive Enforcement Notices produced an average of 26.5 million Turkmengaz which contemplates moving from mature assets in the UK, in Production Solutions: standard cubic feet per day (mmscfd) into a second phase in 2010 which would conjunction with the asset owners ■ the service operator contract with Dubai of gas during the year involve a lump-sum EPC contract with Petroleum exceeded production targets ■ the acquisition of the floating a not to exceed value of US$4 billion Enhanced mechanical services capability agreed with the customer production facility, the AHOO1, from through a JV with Zamil Group in Saudi ■ consultancy business Caltec awarded Initial progress on these awards has been Hess and Endeavour Energy UK. Arabia and through the acquisition of the Offshore Contractors Association’s in line with expectations and in addition Now renamed the FPF1, options for Challenge Award for Technology and we have made good progress across our Scotvalve Services redeployment are under consideration Innovation for its Wellcom system broader portfolio of projects in Syria, Egypt, Tunisia, Oman, Kuwait and Algeria 6 7 Petrofac Annual report Petrofac Annual report and accounts 2009 and accounts 2009 Structure Overview Our services Although our performance is reported through four business segments, beneath these segments, seven business units ensure we endeavour to meet our customers’ needs across the full life cycle of oil & gas assets, from design to decommissioning.